What is clustering?

Amid all the momentous developments in the generative AI data space, are you a data scientist struggling to make sense of your data? Still finding it hard to connect the dots and apply fancy big-data insights? 

Clustering is here to help. In the realm of machine-learning algorithms, it’s a fundamental technique that discovers patterns and groups together similar data points. By enabling machines to identify similarities and differences, a clustering algorithm works by making inferences and providing actionable insights that can be used across many applications. 

What is clustering in machine-learning models? 

Clustering refers to the process of partitioning a dataset into different groups, called clusters. The data points in each cluster share similar characteristics or properties. What’s a clustering example? Age demographics, personal interests, buying preferences, and genetic similarities are just a few. 

Unsupervised machine learning is particularly useful in clustering, as it enables the grouping of data points based on similarities or patterns. In the context of cluster analysis, unsupervised learning algorithms analyze the input data to identify commonalities and differences among data points. These algorithms don’t rely on predefined labels or target variables; instead, they use mathematical techniques to measure similarity or dissimilarity between data points.  

Types of clustering 

When asking what clustering is within data science, we also need to look at the different types of clustering methods. Clusters can be categorized in several categories — and subcategories — each with their own approach and purpose.

Here are some types of different clustering: 

Partition based 

K-means clustering 

For various reasons, including its speed, this is one of the most popular clustering algorithms. It aims to partition data into k clusters, where k is a user-defined parameter. The algorithm iteratively assigns cluster data points to the nearest cluster center, or centroid. It adjusts the cluster centroids until convergence, when the centroid values no longer change and the defined number of iterations has been reached. That means, for example, that the k-means clustering algorithm can be utilized by an ecommerce site to group customers based on their purchasing behavior. 


In k-medoids clustering, the algorithm starts by randomly selecting k data points as the beginner medoids. Then, it iteratively assigns each data point to the nearest medoid and updates the medoids to minimize the total dissimilarity (distance) between the data points and their assigned medoids. This process, too, continues until convergence, the point at which the medoids remain unchanged or the improvement in the clustering is insignificant. 



This approach starts with individual data points as separate clusters and gradually merges them based on similarity. This “bottom-up” algorithm (starts from the beginning instead of from the end and works backward) allows for a flexible number of clusters and creates a hierarchical structure represented by a dendrogram. Using linkage criteria such as single, complete, or average, agglomerative clustering can be applied to various domains to reveal patterns and relationships in data analysis. 


Also known as top-down clustering, divisive clustering is a hierarchical clustering algorithm that starts with all data points in a single cluster and recursively divides them into smaller clusters. This approach begins by considering all data points as one cluster and then iteratively partitioning them based on dissimilarity. Divisive clustering is advantageous when the number of clusters is not known in advance, and it can provide insights into hierarchical relationships in the data analysis.  

Density based 

Density-based spatial clustering of applications with noise (DBSCAN)

This powerful clustering algorithm is particularly effective in identifying clusters of arbitrary shapes and handling outliers. DBSCAN defines clusters as dense regions of data points separated by regions of low density. It works by exploring the local neighborhood of each data point, determining its density and connecting neighboring points to form clusters.

Unlike other clustering algorithms, DBSCAN clustering does not require specifying the number of clusters in advance. Instead, it automatically discovers clusters based on the data distribution and density. 

Additionally, DBSCAN can identify noise points that do not belong to any cluster. With its ability to handle complex data structures and noise, this algorithm works well in fields such as anomaly detection, customer segmentation, and image processing

Model based 

Gaussian mixture models (GMM)

This popular technique for clustering and density estimation assumes the data is generated from a mixture of Gaussian distributions. GMM represents each cluster as a multivariate Gaussian distribution with its own mean and covariance matrix. The algorithm learns these parameters by iteratively maximizing the likelihood of the data. GMM assigns probabilities to data points, indicating their likelihood of belonging to each cluster. This provides a soft assignment of points to clusters, allowing for overlapping clusters.

GMM is versatile and can handle clusters of different shapes and sizes. Its various applications include image segmentation, speech recognition, and anomaly detection, areas in which accurately modeling underlying data distribution is crucial for uncovering hidden patterns and making informed decisions.

Clustering purposes and applications 

So we’ve answered the question “What is clustering?” and looked at the various types. But what’s the end result? Clustering serves various purposes across multiple domains. It enables analysts to uncover patterns, group similar data points, and gain insights from complex datasets.

Let’s look at some of the purposes and applications of clustering in different fields. 

Customer segmentation

Clustering is a powerful tool for business owners and managers who want to effectively segment their customer base. By grouping customers based on their behavior, preferences, or demographics, a company can gain a deeper understanding of its target market and thereby create effective tailored marketing strategies.  

For example, a clothing retailer could cluster its shoppers based on purchasing history and preferences, and then, using the market segmentation data, accurately create personalized recommendations and promotions. This would be likely to not only improve customer satisfaction but increase the chances of making successful sales. 

Anomaly detection

Clustering is a valuable technique for identifying outliers and anomalies in datasets. By grouping together normal data points, clustering algorithms can identify data points that deviate significantly from that norm. 

This ability can be particularly useful in domains such as finance, network security, and healthcare. For example, in fraud detection, clustering can help identify unusual patterns of transactions that may indicate fraudulent activity. In network security, it can help detect unusual network behavior and intrusions. By promptly detecting and addressing anomalies, businesses can prevent potential errors, fraud, and system failures. 

Image and document organization

Clustering is widely used in image and document organization to efficiently group similar images, documents, and articles. For example, with image recognition, clustering algorithms can analyze the visual features of images and group them based on similarity. This allows for efficient image retrieval and organization, making it easier to manage large image collections. Similarly, in document organization, clustering can group documents based on their content similarity, making it easier to search for, retrieve, and analyze relevant information. 

Data compression

Clustering can also be used for data compression by reducing the dimensionality of large datasets. By standing for similar data points with a single representative, clustering algorithms can reduce the amount of data to be processed and stored. This not only saves storage space but enables faster data processing and analysis. For example, in data-mining applications, clustering can be used to compress high-dimensional datasets, making it more manageable and efficient to extract meaningful insights.

Want to tap the benefits of clustering?

At Algolia, our NeuralSearch technology supplies artificial-intelligence-based search with proven performance and reliability. For us, clusters are gateways to uncovering hidden patterns and unlocking insights, and we’re upping our game by integrating clustering techniques that provide unparalleled site search and recommendations

Want to put our AI-aided search relevance, personalization, and dynamic content grouping technology to work improving your users’ search and discovery experiences, plus improve your site metrics as a result of this optimization? Get in touch today.

About the authorVincent Caruana

Vincent Caruana

Senior Digital Marketing Manager, SEO

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